Chapter 13

Is proof of insurability needed for group health?

1. not needed 2. Although it may be required if you decline and later want to join

How long does the covered employee has to notify the plan administrator?

60 days Has a grace period on payment of premiums of 30 days

What is considered Eligibility?

1. 18 months of creditable coverage on a group plan 2. Not eligible for coverage under a group plan or social plan 3. No other health insurance 4. Not cancelled for nonpayment or fraud 5. Has exhausted COBRA coverage

What is the difference in Contractual Character between group and individual plan?

1. An individual policy is a two party contract between the insurer and the insured. 2. A group policy is a two party contract between the insurer and the employer, with the insured as an additional entity.

What is the difference in Cancelability between group and individual plan?

1. An individual policy may be cancelled if it is not guaranteed renewable 2. Group policy coverage cannot be cancelled for any individual without cancelling the entire group policy

What is the Major Medical Expense Covered by group health?

1. Comprehensive plans usually require satisfaction of an initial deductible 2. Commonly require a corridor or integrated deductible 3. Provide more extensive benefits than individuals do, some with no max benefit limit

What are contributory/noncontributory?

1. Contributory- Employee pays part of the premium (75% of eligible employees) 2. Noncontributory- employer pays the full premium. (100% of eligible employees)

How are Key Employee Business Policies taxed?

1. Disability income premiums are not deductible and benefits not taxed if proceeds are payable to the company 2. Disability income premiums are deductible and benefits taxed if proceeds are payable to the employee 3. Medical expense insurance premiums paid by employer are deductible and benefits received usually not taxable, as they are a reimbursement of incurred expenses

What are some of the General HIPAA provisions?

1. Exemption from the IRA early withdrawal penalty on funds used to pay medical expenses in excess of 7.5% of adjust gross income 2. Qualified long term care insurance for chronically ill persons treated as health insurance so that benefits will be considered non taxable reimbursements for medical care 3. Creation of the Medical Savings Account for small businesses, the self employed, and their employees and families. 4. Self employed individuals now allowed to deduct 100% of health insurance costs from income 5. Guaranteed availability of health coverage for small employers

What is a Group Accidental Death and Dismemberment

1. Group Ad&D coverage may be included in a group life insurance plan or provide as a separate policy. 2. Separate policies are called Voluntary Group AD&D 3. Usually no conversion privilege 4. pays principal sum on Accidental death and capital sum on the accidental loss of one body member

What are the features of HIPAA regarding individual plans?

1. Guarantees availability of individual health coverage for eligible individuals 2. Guarantees renewability of individual plans

How are proceeds taxed?

1. Individual disability income policy are not taxed as income 2. Disability income proceeds attributable to employer contributions are taxable. 3. Medical expense insurance proceeds are not taxed as income

Who holds the contract in the group health insurance?

1. Individual employees receive a certificate of insurance 2. The employer or association owns the Master contract

What is the difference in coverage between group and individual plan?

1. Individual plans cover both occupational and nonoccupational illnesses and injuries 2. Group Health cover nonoccupation conditions and leave the occupation ones to workers compensation insurance

How are premium taxed?

1. Individual premiums are not tax deductible- person expense 2. Premiums paid by employers on behalf of workers are tax deductible for employers - business expense 3. Premiums paid by employers on behalf of workers are excluded from workers taxable income

How are Medical Expense Insurance Taxed?

1. Individual premiums are not tax deductible- personal expense 2. Incurred medical expenses reimbursed by insurance are not tax deductible 3. Incurred medical expenses not reimbursed by insurance less than 7.5 % of income are not taxable, over 7.5% are deductible 4. Self Employed person may deduct all medical care expenses

What are Group Health Insurance?

1. Insurance that covers a number of individuals under one plan 2. Must be incidental- individuals cannot form a group just for the purpose of obtaining group health insurance

What is the Coordination of benefits provision?

1. Limits the total amount of claims paid by all insurers to the total allowable medical expenses, eliminating duplication and over insurance by multiple policies or plans.

What is a group disability income?

1. Long Term and short term insurance. 2. more restrictive definition of disability than individuals plan 3. Short Term benefits period of 6-18 months, while long term are similar in length to individual plans 4. Benefits are reduced by any other benefits received. 5. Benefits base on earnings 6. Supplemental to worker's compensation

What are the features of group health plans?

1. Lower costs- than individual plans 2. Predetermined benefits- 3. Conversion- can convert certificate to an individual policy 4. Preexisting conditions-

What kind of coverage in provided with group health plans?

1. Medical expense coverage 2. Dental and vision care 3. Prescription drugs 4. Home health care 5. Extended care 6.Laboratory services 7. Diagnostic X-Rays

HIPAA protects the consumer's rights to health coverage in the transition from:

1. One group health plan to another group health plan 2. A group health plan to an individual policy 3. An individual policy to a new group health plan

What are group conversion rights?

1. Participants in a group policy have the right to convert group coverage to an individual plan when the individual leaves the group 2. After termination, you have 31 days to exercise the right 3. Privilege does not extent to employees who retire

What is a primary and secondary plans?

1. Primary plan- responsible for paying its full benefit before any secondary provided begins to pay, The total paid can never exceed the total cost. 2. Used when a married couple both working both have group health coverage 3. Each plan will be primary for 1 and secondary for the other spouse

What are the features of HIPAA regarding group plans?

1. Prohibits discrimination against employees based on health factors 2. Requires special enrollment opportunities for individuals who lose other group coverage 3. Requires the issuance of certificates of creditable coverage 4. Guarantees renewability for all group health plans, unless no payment, fraud etc. 5. Limits the period for denying coverage under a group health plan for a pre-existing condition to 12 months (18 months for late enrolleess)

What is a Group Credit Health?

1. Protects a lender or creditor in case a borrower becomes disabled and cannot meet loan payments 2. Lender/creditor pays for the policy 3. Coverage amount cannot exceed the sum of payments due 4. Typically used when there is a large loan amount

What did HIPAA do regarding Disclosures?

1. Providers must give notice to the individual describing the use and protection of personal health information and rights 2. Providers must guard patient confidentiality and protect their information 3. Insurers must train employees and producers in guidelines of protecting client information 4. Insurers must keep an applicant's medical information confidential

What is Portability?

1. Refers to the certificate of credible coverage an employer must issue to a previously covered employee. 2. An individual qualified for a certificate must have been covered under a group health plan with no gaps longer than 63 days

Under HIPAA, the insured or applicant has the right to?

1. Specify who is given authority to access the information 2. Specify the type of information to be disclosed 3. Acknowledge the right to inspect or copy the information 4. Revoke the authorization 5. Acknowledge that the disclosed information may be disclosed further 6. Set a termination date for the authorization

What is HIPAA?

1. The Health Insurance Portability and Accountability Act of 1997 was designed to improve access to long term care coverage and provide continuity of group and individual health care.

What are some of the features of COBRA?

1. coverage is likewise extended to beneficiaries if the employee dies 2. Qualified beneficiaries include spouse and children 3. Coverage must be identical to the group plan 4. Coverage is not required if employer terminates the group plan 5. Coverage may terminate if the beneficiary receives coverage under another plan

What are Blanket Health Plans?

A blanket plan covers a group that is exposed to the same risks, but the membership of the group is constantly changing. Examples of such groups are students in a school or passengers on an airplane

What are Franchise Health Plans?

Franchise plans cover members of an association or society. The association sponsors the plan, but, unlike a regular group plan, individuals receive individual policies.

What are the Continuation of benefits?

Group medical expenses plans covering 20 or more employees must continue coverage for terminated employees and their dependents for up to 18 months (29 months if disabled, 36 months under special circumstances) Employee may be require to pay 102 % of premium

What are the Maternity Benefits for group Health?

Groups plans covering 15 or more people are reqruired by federal law to provide the same coverage for pregnancy related claims as they do for any other allowable medical expense

What is COBRA?

The consolidated omnibus budget Reconciliation Act requires employers to provide a qualified departing employee with a temporary equivalent to any group health coverage the employee had or was eligible for while with the employer 1. Period of coverage is 18 months up to 36 months.

T/F self employed individuals can deduct 100% of health insurance costs

True

T/F the health insurance company must renew your policy

True, unless the individual no longer wants it.

How are preexisting conditions handled with a group health insurance?

under the Health Insurance Portability and Accountability Act (HIPAA), the exclusion for preexisting conditions is limited to conditions for which the individual sought or received medical advice within 6 months before the enrollment date, and cannot extend longer than 12 months for normal enrollments.

How much would the employee be charged under COBRA?

up to 102% of the premium.